more succession ideas

https://beta.theglobeandmail.com/globe-investor/personal-finance/taxes/reduce-the-sting-of-taxes-when-making-gifts/article36742057/

J, J and G Sing

/Users/mathies/Desktop/Bekanon.mov

Ontario Today Phone-In

The CBC radio show Ontario Today had a phone-in today all about cottages and succession planning, and I thought that people might like to have a listen. People called in with both good experiences and disasters. There was also legal advice from Elaine Blades, Director for Estate Services at Scotia Private Client Group, on how to navigate probate, trusts and capital gains tax.

Cottage Trust

Here is a link to the topic:

Seven Hints for Holding a Cottage in Trust, by Tim Cestnick

Estate planning

Website of law firm that advertises expertise in cottage estate planning: www.lbkglaw.com

Getting Going for Summer 2011

Ok, so I set up the blog last fall but as we head into the summer I'm hoping that things start to take off here.  So if there's something that you think that the rest of us should know about, or something that you think we should be remembering in the long term, post it!

You may notice a link off to the right that leads to some Flickr photos.  I started a special group on Flickr for our cottage pictures, so if you have an account already then head over there for the membership request.  If you don't have a Flickr account, and you need help setting one up then call me and I can walk you through it.  You can view the photos without having a Flickr account, you just can't add any of your own.

I'm currently the gatekeeper for the admin account for the blog (otherwise I think things could get a bit messy), but if you have any ideas that you'd like to implement, or know of any widgets that you think would work well for our needs, then please let me know!

Here's to another great summer up north!

Non-Profit Corporation?

Family members may choose to register the title to the cottage in a non-profit corporation, especially if there are more than two or three co-owners. In this scenario, family members become due-paying members of the organization. The organization must establish a board of directors, which has various duties, such as setting out bylaws and rules relating to dues and maintenance. Although this strategy is beneficial to avoid family conflicts, it requires specialized advice and may not be suitable for everyone.

Family Trust?

Some thoughts about an unresolved issue. I need to look at the idea of a trust vs incorporation. It's either a better idea or Rudy Dorner is simply ahead of the curve with his advice to us to incorporate.

This article is more support for forward planning: Cottage Succession Often No Vacation

Incorporation

I had a brief conversation with my lawyer Glen Smith about incorporation and its costs. He thinks it is a reasonable idea, among others (could go the way of partnership as well - pros and cons to everything).

The costs would be incorporation fee ($1200 - $1500), land transfer tax ($7000), and yearly renewal ($150) and tax return, and capital gain tax (50% of net value after expenses/improvement costs - this can be lowballed by us so long as we stay under the radar of the CRA). The latter will have to be paid by our inheritors regardless, unless one buys insurance for them. I have already done this because I can't be sure if or when they would be able to afford this. Pay now or pay later, so I consider that a wash.

It is the fees which are the add-on to the status quo, but are the price for providing our inheritors with a structure to deal with future governance. Glen has dealt with a number of fights over properties purchased by a group of buddies 60 years ago (hunt camps) that are now owned by disparate collections of individuals who are unable to work things out, and are without such structures that would make things much easier.

Annual Meeting 2010 - Minutes

Sunday, November 21, 2010, 12:00 PM @ Bookshelf, Guelph

Financial Report: Presented by Glenna

Projects and Issues

Completed in 2009:

1. Blinds (horizontal): Sheila to investigate. She suggested pulldowns. 4 sections were discussed. Sheila will check into prices etc. and distribute her findings.

2. Guy wires in flag pole let go: redo the entire support structure and lengthen pole to adjust for the 5 feet that broke off in the collapse this summer.

3. Biffy is well underway.

4. Quilts are being stored in the attic. Glenna has acquired sufficient breathable bags to store them in and they are in the attic (except for the ones that have been left out for the winter)

Outstanding issues:

1. Fix/replace leg on frame in NE bedroom

2. Crane for outboard. Dolly for outboard. (D&D)

3. Puttying and painting of windows: All

4. Check with Doug Wright re rebuilding costs: D&D: We talked to Graham. He sent a guy out: still no report, just that it would cost 2X what it would on mainland.

5. There was a suggestion and agreement that we could begin to replace mattresses in the bunky and other rooms on an ongoing basis. Consider foam mattresses, as they are somewhat less prone to trapping allergens. Vicky will look into replacing 2 of these mattresses a year until everything is in good shape. There was discussion that these new mattresses should get removable mattress covers.

6. There was discussion about incorporating the camp and beginning to address succession concerns. Also discussed were policies to allow grown children of owners to use the island without parental supervision.  The discussion regarding incorporation will involve time and thought. It will likely take several years to get it in place.

New for 2011

1. Flagpole: wire for lifting the flag broke. Replace at fishing weekend.

2. Reverse the direction of the door swing in the NE bedroom.

3. Creation of a “Bekanon Island Blog.” This will be used to store a “Bekanon Island Operations Manual” as well as create a record of understandings, rules and new decisions etc. Also photos can be cached there. Archival and reference materials can be stored on the blog, along with appropriate links.

Sheila will undertake the creation of this blog.

4. Walkways: A lot of walkways are getting mossy and so very slippery when wet. Our bones are getting more fragile. What can be done to prevent moss from growing in these areas (Pentox? Other?)

5. Kitchen Drawers: Max has pointed out that for fairly minimal cost and effort our kitchen cupboards could be replaced with full pull-out drawers allowing better access and organization. Pre-made hardware is available from Lee Valley Tools. The Mathies point out that at the same time we could elevate the counters at least up to normal heights (the window height being the logical limit).

David M pointed out that the existing laminate is lifting and the underlying wood is beginning to rot.

The project will be estimated as to cost and these numbers will be distributed for final approval prior to moving forward.

6. A bench for the end of the dining room: storage, seating and a daybed all in one: instead of the wicker sofa etc.

7. Fascia: David M points out that our fascia is letting go. He will order the appropriate supplies, including pre-painted boards ready for installation.

Other Issues

1. By way of clarification: Owners and offspring can bring pets. Pets belonging to others are not permitted.

2. Discussion re ownership transition. It was pointed out that incorporation may be needlessly complex. Further investigation to follow. David M will make information available, possibly through the blog.

2011 Bekanon Schedule:

Work weekend: June 3 – 6 (Friday – Monday)

Order of Selection: 1(M), 2 (B/J), 3(K/D), 4(K/D), 5(B/J), 6(B/J), 7(M), 8(M), 9(K/D)

Click here to see the 2011 Schedule.